Monday, February 9

Never-never (save) land

We were down visiting Tim's parents this week. Whenever we're in the area, we also drop by Tacoma (about a 15-minute drive) and see some of the people he grew up with.

As always, it's a bit of a culture shock for me.

It's not that Tacoma is some foreign land, but there are definitely different norms when you grow up there. Kids come earlier, marriage comes later (if at all), and financial considerations pretty much have no role in either. Most of them don't have credit cards, some don't even have bank accounts. Nobody bats an eye when someone talks about paying a check-cashing fee.

I want to stress, making bad financial decisions is very, very different from being a bad person. They have been nothing but friendly and welcoming to me, despite the fact that Tim is about the only thing we have in common.

But no one in this community thinks very far ahead in the financial future. Decisions are made based on today. They don't expect to ever be financially stable, so it becomes a self-fulfilling prophecy.

Two of Tim's friends, let's call them Tom and Deanna, will probably never get their financial feet under them. Until 6 months ago, they were living in a one-bedroom house with their two sons, 3 and 7. If not for some very tragic turns of fate, they would have three more children.

Now they have moved into a rental house (owned by Tom's mom) so everyone has room to breathe.

Tom works in construction, mainly drywall. He gets paid very well for what he does, but the work comes in fits and starts. This year was a particularly bad year and he spent most of the last 6 or so months out of work.

Deanna didn't work much this year, for a combination of reasons (some good, some specious). Around September, she got a $10/hr job. By the time she started, they were quite literally on their last few dollars. They had to use vouchers from the state so that they could have interview attire and things like razors, so that Tom could be clean shaven for interviews.

Tom is doing more work now, and so Deanna was able to quit her job, which was requiring her to work 6 p.m. to 4 a.m. -- and had just informed her that her pay was about to decrease.

Despite finances being a little less irregular now, they're still living precariously. They were counting on Tom's tax return having come in by now. (H&R Block promised his card would be loaded in 8 to 15 days. That was on January 15.)Because they still aren't married, Tom was able to claim the kids and is getting over $8000 back -- after the $239 H&R Block fee.

But the tax money still hasn't come through -- according to the IRS the payment is due by Feb 24th, delayed because of processing difficulties.

Deanna told me she didn't have enough for rent. She received a second notice for her water/sewer/garbage. The next stage is having the utilities shut off. Things were so tight, she said, that they were selling some pain pills from a recent surgery. She hastened to add that they didn't usually do that sort of thing, but the cash was kind of important.

This all came about an hour after she'd convinced us to try out a Chinese buffet with them that night. She had a 15%-off coupon and a punch card that, with four people eating, would give them a free meal. When I asked how much it was, she said it was "only" about $10 a person. (The free meal would have lessened the cost, at least for her, but the restaurant wouldn't combine the coupons. The total was $23 a couple. Not bad, but more than I had planned to spend on a single meal.)

By dinnertime, things were pretty relaxed. Tom's boss finally stopped by with $200 from a job Tom did in early December. Tom said they should go out to the casino, now that they had the money. Deanna reminded him we were going to dinner.

Tim added that we probably couldn't afford to go a casino anyway. Though, he said, he'd check with me. Tom said he'd give us $20 to help ease the cost. A nice offer but we couldn't afford both dinner and the casino. And it's harder to get carried away and overspend at dinner.

After dinner, and back at their house, I got on the computer to show Deanna the Bank of America settlement website so that they could apply. It went quite quickly thanks to their cable modem.

Also, while we were there, I discovered they have cable. Based on the channels they mentioned, their package costs $55.75 a month, though they would get a $10/month discount on their cable modem for having multiple services. And if they bundled their phone in, they could be paying $33 for each of the three services.

Still, I have to wonder how useful cable internet is if your water gets shut off.

And just in case my judgmental-alarm wasn't already blaring away, Deanna casually mentioned that she's considering declaring bankruptcy. Given that she has no credit cards or bank accounts, I was quite curious as to why she'd do that.

Her student loans. She kept deferring them, she said, but they'll never have enough money to pay them off.

How much do you owe, I asked. She looked solemn and slightly wide-eyed when she said they were over $10,000.

I suggested she start with $50 a month for now, increasing when she becomes employed again. "They don't want $50 a month," she told me. I tried to explain that all she had to do was call and say it was $50 or nothing -- assuring her that the government would take the former.

That's when she and Tom told me they don't think they should have to pay the loans back anyway. She had to stop her schooling because of complications with a pregnancy. She never went back. And they were only teaching her things that she learned in high school, anyway.

Despite my better judgment, I argued (as politely as possible) that it was a shame the school was sub-par, but wasn't that her responsibility to check out before taking out the loans? They both maintained that since the college didn't help her get or find a job -- and since the education was mostly things she already knew -- they shouldn't have to pay the money.

Deanna did add that the school is closed and there are lawsuits pending. My advice was to hold off on any decisions until something came from that, but she's doubtful that it will get resolved ever.

I guess it didn't register with them that we'd be a bad audience for that kind dismissive attitude. After all, we just in November finished paying off Tim's $15,000 of student loans -- also to a school with slightly shady practices.

I guess it also didn't occur to them that the $8,500 Tom is getting back would make an excellent initial payment against those debts. Much better that her son gets his Lightning McQueen race-car bed, about $250 in stores.

The thing is, no matter how much of a headache it gives me, Tom and Deanna's situation and attitude toward money are totally common in this area. Like I said, no one expects to get ahead financially. People routinely move back in with parents in between jobs. Some don't even bother leaving while employed, spending the funds on girlfriends, food out and hobbies. They spend their entire paycheck and then wonder how they'll make it for the next 10 days.

They expect to forever be fighting to make ends meet, which means they had better enjoy what reprieves they get. So when a little money comes in, they go out to eat, even if they can't pay their rent or their water. They firmly believe that it's easier to not have a bank account, but instead to pay check-cashing fees. Not being able to afford the kids they have, they don't see much point in consistently guarding against future pregnancies.

In essence, they live in a nearly pure state of reaction. They If they get pregnant, that's just the way it is. They don't make plans. They simply try to keep their heads above water as life happens to them. Unemployment means difficulty in looking for work, because someone has to stay home with the kids. They don't look into state assistance for daycare costs. They live for the today, because they know tomorrow will be another money struggle. And, in living that way, they ensure that that is exactly what will happen.

Wow. Just wow. I grew up on an area with a lot of people like that, but it still surprises me how dumb people can be about their finances. Sure, I understand that sometimes people just can't make ends meet, but if their priorities are cable, eating out, and gambling over paying their utility bills -- well, dumb is probably giving them too much credit.

But won't they be in for a shock if they ever try to file bankruptcy! Student loans aren't (at least not typically) erased by bankruptcy. But they'll probably end up spending more money finding that out from a lawyer.

No, she and the kids are on Medicaid. They plan to get married once the tax return comes through -- a small ceremony at the courthouse. That, however, will probably end up with them getting kicked off. At least during the times that Tom is working.

Meg,

Yeah, driving home from that evening, Tim reminded me that the loans won't go away in bankruptcy. We'll tell them that next time we're down there.

And I asked Tim how someone who has no money for razors can have a cable modem. He just wearily shrugged and said, "Priorities." (He's a reformed spender, so it's both a source of pride that he's gotten his act together and a horror show to watch the people he cares about continue to live this way.)

Fabulously Broke,

I think I will consider that an achievement on my (and Tom and Deanna's) part!

Wow, I have to hand it to you, I would have had a very difficult time not opening my big mouth about getting paid and then wanting to go to a casino, knowing your water was about to be shut off. Surely children need water more than they need their parents to go gambling.

Why did the boss come by with Tom's pay? Sounds like under-the-table.

I have recently been reading a bunch of library books on this very topic: working poor, the "fringe" economy, etc. In one, the author talks at length about the reasons people who can least afford to pay for check cashing fees and rapid refund fees are the very people lining up to do it. It's pretty interesting.

Don't be silly: Under the table money/pay would be ILLEGAL. That would add up to tax evasion. I'm sure his boss merely felt that door to door service was warranted. (cough cough)

But yes, I bit my tongue a few times. Also, I was a little tired, so it took me awhile (read: off and on throughout the evening) to put everything together: water shut-off imminent/cable modem & dinner out.

You are definitely right about the "fringe" economy. My great-aunt apparently takes a cab in to the local diner (around $20 since it's a remote area) at the beginning of every month. I guess the idea is, "It won't be enough anyway. So if we're going to go without, we may as well have some fun now."

On the keeping quiet front, these are Tim's friends so I don't like to open my born-comfortably-middle-class mouth and alienate them. Perhaps that's a whole separate kind of classism, but I feel very acutely middle class and out of place at times with his friends.

Also, as I'll detail later in the week, this wasn't the only case of startingly bad financial logic we encountered this weekend. And we didn't keep quiet that second time. Maybe it was all built up?

What can I say, despair is a funny thing. God I love puns.... I can tell everyone from 1st hand experience that it's hardest to climb out of the depths of debt when you're living hand to mouth like they do. I mean, you get up and go to work for 8+ hours,(And these are the "lucky" ones.)and when you get home all you want to do is have fun. Just cut loose and actually enjoy the money you're practically killing yourself over. And then you look at the bills. I tell ya sometimes it was all I could take not to just stick my head in the oven!! I guess it's a good thing for Abby I'm stubborn as a mule. lol

I've been low-income, and I've been DEEP in consumer debt, but I've never been poor. Poor is an attitude. These people (Tom & Deanna) are poor. Poor can be overcome with just a little bit of knowledge and a willingness to use common sense.

To a certain extent I agree with you. As I said, these people will always be poor, so long as they live like this -- and especially so long as they use their poverty to continue to justify living like this.

But I have to say that poor isn't JUST an attitude. My mother was raising a 1 year old in Philly in 1979. She was working for minimum wage -- and just under 40 hours a week, so they didn't have to give her benefits. In pictures, she is clearly undernourished because she made sure I ate first. And, when her apartment was broken into, the robbers had nothing to take that was of value. So they took two of her 7 t-shirts, meaning she had to hand-wash even more often during the week.

I think there are indeed some cases of being POOR versus being low-income. Tim and I have low incomes but we have credit cards in case of an emergency. And we have family that are in a position to help out. There are people who have no one. (My mom had people, but they were scraping by themselves.)

But inasmuch as you're pointing to the word poor as an attitude that perpetuates a lack of stability, yeah it's more often the cause.

And even when you *are* being diligent (which clearly Deanna and Tom weren't) people without money have to necessarily spend more money. They have to buy smaller amounts of food because they can't afford to stock up for the future -- or buy the bigger amounts of food that would be cheaper per pound. They can't afford the better clothes/shoes/whatever that would last longer. So they have to buy the cheaper version, which wear out faster, which means buying more of the same shoddy product. Etc.

How sad! It is sorry to feel sorry for people like this. There is really no point in arguing with them either because it probably won't do a darn bit of good. As for people like your mother, That is admirable. She made the most of what she had even though it was very little. Obviously she has taught you some of those values too.

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About Me

My husband and I both have chronic health problems that have put us in debt, both because of doctor bills and from a reduced ability to work. We've moved to Phoenix, which has helped some of my husband's conditions. But it will be awhile before we can truly be out of debt.

I write this blog because not everyone frivolously consumed his way into debt. Not everyone can be, as I like to say, the Martha Stewart of frugality.

I try to use my blog to explore frugality in an imperfect world, because I think that's a lot more realistic. Even people without chronic health problems can have life overrun their best frugal intentions.